Overview
IOST (Internet of Services Token) launched its mainnet in February 2019 after raising $35 million in a January 2018 ICO. The project promised an ultra-high-throughput blockchain using Efficient Distributed Sharding (EDS) and a novel Proof of Believability (PoB) consensus mechanism. Marketing materials claimed potential for 100,000+ transactions per second, positioning IOST as a scalability solution for mass-adoption dApps.
In practice, IOST never achieved these throughput numbers under real-world conditions. The chain attracted some dApp development in 2019-2020, primarily gaming and gambling applications, but failed to build a sustainable ecosystem. In 2024-2025, IOST announced a pivot toward AI and Layer 2 infrastructure, attempting to ride current market narratives. The pivot has been met with skepticism from the community.
Technology
IOST's PoB consensus evaluates validators based on a "believability score" incorporating token balance, reputation, transaction behavior, and community reviews. Validators with high believability scores get priority block production rights. The EDS sharding approach dynamically assigns nodes to shards. While the theoretical design is interesting, real-world performance has consistently fallen short of marketed claims. The 100,000 TPS figure was never demonstrated on mainnet under realistic conditions.
Security
PoB's reputation-based validation creates a trust system where misbehaving validators lose believability score. The design incorporates random committee selection to prevent collusion. However, the relatively small active validator set makes the network less secure than larger PoS chains. No major protocol exploits have occurred, though several dApps built on IOST experienced rug pulls and scams during the 2020 DeFi boom. The validator set is too small for robust Byzantine fault tolerance.
Decentralization
IOST has approximately 200 partner nodes, but active block producers are far fewer. The network's governance is heavily influenced by the founding team, with significant token concentration among early investors and the team treasury. The Chinese regulatory environment has complicated operations and community building. The validator set is less decentralized than competing platforms like Cosmos or Polkadot.
Ecosystem
IOST built a modest ecosystem of dApps, primarily in gaming, gambling, and DeFi-lite applications. Some early DeFi protocols and NFT platforms launched on IOST. However, the ecosystem has stagnated as developers migrated to EVM-compatible chains with deeper liquidity and larger user bases. The AI/L2 pivot promises new ecosystem development, but concrete deliverables are limited. The chain maintains some activity in Asian markets.
Tokenomics
IOST has a total supply of approximately 21 billion tokens with most in circulation. The ICO price was approximately $0.01, and the token briefly reached $0.13 before declining over 95%. Staking rewards provide modest yields for validators and delegators. The large circulating supply creates significant dilution pressure. The pivot announcements have caused temporary price pumps followed by selloffs, a pattern that erodes community trust.
Risk Factors
- Failed TPS claims: 100,000+ TPS was never achieved, damaging credibility
- Narrative pivoting: AI/L2 pivot suggests lack of conviction in original vision
- Low adoption: Minimal dApp activity and declining developer interest
- Token decline: Over 95% down from ATH with no fundamental recovery catalyst
- Centralization: Small validator set and team-heavy governance
- Competitive landscape: Dozens of L1 alternatives offer superior ecosystems
Conclusion
IOST represents a common pattern in the 2017-2018 ICO era: ambitious technical promises, significant capital raise, followed by underwhelming delivery. The Proof of Believability concept is intellectually interesting but has not proven superior to simpler PoS mechanisms in practice. The AI/L2 pivot reads as opportunistic rather than strategic — pivoting to whatever narrative is trending suggests the team is searching for product-market fit years after launch. IOST is not a scam, but it is a project that has failed to find its niche despite ample funding and time.